HOW OIL PRICES, INFLATION AND GEOPOLITICAL RISK IMPACT ISLAMIC AND CONVENTIONAL STOCKS

Abstract

Purpose: Experts and analysts are currently working hard in their investigations on this totally different exhibit of asset classes but still there are areas of research that are unexplored. The main motivation ofthis study is to make speculations and decisions regarding investments in financial markets; it has become very important to first analyze how both securities markets either conventional or Islamic differ from one another and what is the impact of factors like oil prices and geopolitical risks on these financial stock market and how they differ from the conventional stock market. inflation, Methodology & Design: This research has examined the regression association between the constructs of oil prices, inflation and GPR with the stock prices as indexed by Dow Jones Islamic Market (DJIM) and Dow Jones Conventional Market (DJCS). The data was extracted from the data stream managed by Thomson Reuters and various websites like World Bank and Dow Jones Stock data webpage for a time period of 2000 to 2020. The whole study was based on empirical significance of dependent and independent variables as well as theoretical support from literature to influence the prices ofstocks. Findings rhe findings shows that Oil Price has insignificant impact on both Islamic as well conventional stocks. Whereas Geopolitical risk has significant impact on both. Lastly, Inflation mpacts significantly on Islamic Stocks but insignificantly on Conventional Stocks as .imitations Although this study makes a significant contribution to the conventional and Islamic stock narket but still this study is not without limitations. As a matter of fact due to time limit the esearch was directed through a not very large sample to make conceivable generalizability for tie outcome. In this manner future research can inspect these factors by utilizing a bigger sample ize. Also, in this study only simple linear regression was run.